Carlson Needs To "Look At The Facts" On Taxes, Income Of The Wealthy
On Fox & Friends, co-host Gretchen Carlson worried that people will believe President Obama's message that the wealthy aren't paying their "fair share" "unless they look at the facts." But the facts show that taxes on the wealthy are at their lowest level -- with one exception -- since 1931, while the income of top earners is at a record high.
Carlson Claims People Need To "Look At The Facts" On Top Earners' Share Of Taxes
Carlson Worries That People Will Believe Wealthy Aren't Paying Their "Fair Share" "Unless They Look At The Facts." On the November 7 edition of Fox News' Fox & Friends, the co-hosts discussed the relationship between House Speaker John Boehner (R-OH) and Obama following Boehner's recent comments on income taxes on the wealthy. Co-host Gretchen Carlson said that she thinks the Obama administration's message that "[p]eople need to pay their fair share" is "sticking with people who maybe are not watching the news cycle 24/7." Carlson then said that "after a while, that [message] sticks in their mind unless they look at the facts." From the broadcast:
STEVE DOOCY (co-host): Yesterday on one of the chat shows this week, the speaker said that their relationship has become frosty. And also the speaker himself was quite specific, with the president saying, you know, this class warfare stuff you're pulling? That's got to stop. Listen to this.
BOEHNER [video]: Come on, the top 1 percent pay 38 percent of the income taxes in America. How much more do you want them to pay? I'll tell you, well, let's take all the money that the rich have, all of it. It won't even put a dent in our current budget deficit much less our debt.
CARLSON: Keep in mind, back then, that was June 23, when they had that golf summit. Remember, we were in that debt discussion crisis, and so both parties were really trying to come together to find a solution. So it was emblematic to see that imagery of the two of them together, and we all know how that ended up.
But the other thing is, you know, John Boehner talks about the fact that the top 1 percent already pays most of the taxes in this country. But I got to tell you, guys, as I go around in communities, I think that the catchphrase that the Obama administration is putting out: fair share. People need to pay their fair share. I hear that, and I think to a certain extent, some of that language is sticking with people who maybe are not watching the news cycle 24/7, and they hear, hey, people should pay their fair share, and after a while, that sticks in their mind unless they look at the facts. [Fox News, Fox & Friends, 11/7/11]
But Taxes On Top Earners Are At Historic Lows ...
Bloomberg Businessweek: "Except For A Period From 1988 To 1992, The Top Tax Rate Has Never Been This Low Since 1931." A December 15, 2010, Bloomberg Businessweek article stated that Congress' pending renewal of the Bush tax cuts would create "an environment in which their tax rates on income and investments remain at historic lows." From the article:
A bonanza of new and extended tax benefits could make it as easy as ever for the rich to stay that way.
Under legislation approved by the U.S. Senate on Wednesday, Dec. 15, and now moving on to the House, savvy wealthy Americans would be able to capitalize on an environment in which their tax rates on income and investments remain at historic lows. Also, new rules would make it possible to pass on fortunes to heirs with less fuss and lower taxes than all but a brief period of the past 80 years. It's a far cry from the 70 percent bite the federal government took out of the largest incomes and estates as recently as 1980.
"The climate we'll have after this legislation is extremely favorable for wealthy families," says Jeffrey Cooper, a professor at Quinnipiac University School of Law and a former estate planner who has studied the history of U.S. tax law.
The good news for the rich starts with income tax rates, which for top income groups would remain 35 percent , a rate enacted by former President George W. Bush in 2003. Except for a period from 1988 to 1992, the top tax rate has never been this low since 1931.
"Top rates are incredibly low from a historical perspective," says Indiana University law professor Ajay Mehrotra. The most surprising thing, he says, is that rates have remained at this level even as the U.S. has been fighting two wars, in Afghanistan and Iraq. Historically, income taxes on the wealthy have spiked during wartime: The first income tax was initiated during the Civil War and then later repealed. The top rate on income hit 77 percent in 1918, during World War I, and 94 percent from 1944 to 1945, during World War II. [Bloomberg Businessweek, 12/15/10 ]
CBPP: "The Effective Federal Income Tax Rate For The 400 Taxpayers With The Very Highest Incomes Has Declined By Nearly Half Over The Past Two Decades." A February 23, 2010, report by the Center on Budget and Policy Priorities (CBPP) found:
The effective federal income tax rate for the 400 taxpayers with the very highest incomes has declined by nearly half over the past two decades, even as their pre-tax incomes have grown five times larger, new IRS data show.
The top 400 households paid 16.6 percent of their income in federal individual income taxes in 2007, down from 30 percent in 1995. This decline works out to a tax cut of $46 million per filer in 2007, or a total of $18 billion in tax cuts for these households per year.
To make it into the top 400, a household needed an adjusted gross income of at least $35 million in 1992 (in 2007 dollars) and $139 million in 2007.
The decline in effective tax rates at the very top is due in large part to the capital gains tax cuts enacted in 1997 and 2003. The top marginal tax rate on capital gains is now 15 percent, less than half the top tax rate on wages and salaries. The top 400 taxpayers derived two-thirds of their income from capital gains and qualified dividends in 2007.
The report included the following chart, showing federal income tax rates for millionaire households as well as the top 400 households:
[CBPP, 2/23/10 ]
CBPP: "Typical Middle-Class Households Face Higher Tax Rates Than Some High-Income Households." A September 20 post on the CBPP blog, Off the Charts, showed that households with an annual income of over $1 million that earn over two-thirds of their income from investment paid a lower tax rate in 2011 than most middle-income families:
[CBPP, Off the Charts, 9/20/11 ]
... While Income Of Wealthiest Is At Record Highs
CEPR Report Shows Income Of Top 1 Percent Increased 256 Percent From 1979-2006, While Lowest Quintile Saw Incomes Rise 11 Percent. From a December 2010 report released by the Center for Economic and Policy Research (CEPR):
[CEPR, December 2010 ]
Vanity Fair: "Upper 1 Percent" Take In "Nearly A Quarter Of The Nation's Income" As Compared To "12 Percent" 25 Years Ago. From a May 2011 Vanity Fair article by Nobel Laureate economist Joseph Stiglitz:
It's no use pretending that what has obviously happened has not in fact happened. The upper 1 percent of Americans are now taking in nearly a quarter of the nation's income every year. In terms of wealth rather than income, the top 1 percent control 40 percent. Their lot in life has improved considerably. Twenty-five years ago, the corresponding figures were 12 percent and 33 percent. One response might be to celebrate the ingenuity and drive that brought good fortune to these people, and to contend that a rising tide lifts all boats. That response would be misguided. While the top 1 percent have seen their incomes rise 18 percent over the past decade, those in the middle have actually seen their incomes fall. For men with only high-school degrees, the decline has been precipitous -- 12 percent in the last quarter-century alone. All the growth in recent decades -- and more -- has gone to those at the top. In terms of income equality, America lags behind any country in the old, ossified Europe that President George W. Bush used to deride. Among our closest counterparts are Russia with its oligarchs and Iran. While many of the old centers of inequality in Latin America, such as Brazil, have been striving in recent years, rather successfully, to improve the plight of the poor and reduce gaps in income, America has allowed inequality to grow. [Vanity Fair, May 2011 , emphasis added]
Huffington Post: "For 2007 ... The Top One Percent Of Earners ... Enjoyed A 6.8 Percent Growth" In Income, "Versus The 3.7 Percent Average" In The U.S. In a March 2010 article titled, "Number of U.S. Millionaires Soared In 2009: Spectrem Group," The Huffington Post wrote:
Of course, household incomes have been growing unevenly for years -- even during times of seeming prosperity. For 2007, the year for which the most recent data is available, the top one percent of earners -- those with incomes of at least $398,000 per year -- enjoyed a 6.8 percent growth (versus the 3.7 percent average), boosting their share of the country's total income to 23.5 percent. [The Huffington Post, 3/9/10 ]
Fox Has A History Of Defending The Wealthiest, Claiming Taxes On Wealthy Are Too High
Doocy Called For Higher Taxes On The Middle Class: "The Progressive Income Tax Has Not Been So Fair." During the August 3 broadcast of Fox & Friends, the co-hosts said that "almost half of this country pays no income tax," and Doocy went on to say: "[S]o when the president of the United States says everybody's got to chip in, is he talking about all those people who don't pay taxes currently? ... Going forward, if we're going to make things fairer, are people who currently don't pay taxes, will they have to pay something?" [Fox News, Fox & Friends, 8/3/11 , via Media Matters]
Fox Has Repeatedly Called Tax Increases On The Wealthy "Class Warfare" But Have Approved Of Plans That Would Raise Taxes On The Poor. Fox figures have repeatedly called any proposals to increase taxes on the wealthy "class warfare," but they have also hyped Herman Cain's 9-9-9 plan, which would raise taxes on poor and middle-income families. [Media Matters, 10/6/11 ]
Fox Hyped WSJ Claim That Number Of "Millionaires" Is Declining. During the August 18 broadcast of Fox & Friends, Fox Business host Stuart Varney hyped a Wall Street Journal editorial claiming that the "number of millionaires" "was drastically cut between 2007 and 2009."
- In Fact, WSJ Editorial Used Flawed "Narrower Measure" Of Worth, And Many Other Reports Showed The Opposite Is True. Experts told Media Matters that the Journal editorial used a "narrower measure of worth" to back its claim, and a large number of reports showed that as measured in total assets, the number of millionaires has been increasing over the past several years. [Media Matters, 8/18/11 ]
Fox Attacked Warren Buffett Following Obama's Proposal Of "Buffett Rule." Fox figures jumped to attack billionaire investor Warren Buffett following his New York Times op-ed in which Buffett urged Congress to "immediately" raise rates on "income in excess of $1 million." [Media Matters, 9/20/11 ]
Fox Claimed Income Made From Capital Gains Is Not Income. In several September broadcasts, Fox & Friends repeatedly claimed that wealthy earners' income faces a "double tax" because income earned from working is taxed, as is income earned through capital gains and dividend payouts.
- In Fact, Income Earned From Capital Gains Taxes Is Also Income. Income earned from capital gains and dividend payouts is also income, although it is taxed at a lower rate than income earned by working. [Media Matters, 9/21/11 ]
On Fox, Mark Steyn Called For Tax Break For Wealthy. On the October 20 edition of Fox & Friends, conservative commentator Mark Steyn claimed, "[T]he richest 1 percent already pay enough taxes. What do the richest 1 percent do when you don't take their money? They hire people, they invest."
- In Fact, Income Of Top 1 Percent Is At Record Highs, But Hiring Remains Slow. While income for the top 1 percent of earners has reached historic highs in the past several years, hiring has remained slow. [Media Matters, 10/20/11 ]